Purpose of the Bill

The main purpose of this bill is to modify existing provisions related to provider taxes in Minnesota. Specifically, it focuses on how the tax rates on providers can be altered based on the financial standing of the Health Care Access Fund.

Main Provisions

• Annual Review: The bill requires the commissioner of management and budget to determine the projected balance in the Health Care Access Fund each year. This is to assess if there are more revenues than needed compared to expenditures, i.e., a financial ratio of more than 125 percent.

• Tax Rate Reduction: If the financial assessment confirms that the fund's revenues are significantly higher than expenditures, the commissioner, in consultation with the commissioner of revenue, may reduce the tax rates for providers for the following year. This reduction is meant to align revenues more closely with expenditures.

• Specific Guidelines: Any potential tax rate reduction is to be calculated so that the biennium's revenues do not exceed 125 percent of projected expenditures. The new tax rate should be rounded to the nearest one-tenth of a percent.

• Expiration and Reevaluation: The provision for the reduced tax rate only applies for one calendar year and requires a reevaluation every year to determine if a new adjustment is needed.

Significant Changes to Existing Law

The amendment introduces a more systematic approach to adjusting provider tax rates based on the biennial financial status of the Health Care Access Fund. It clarifies and specifies the conditions and procedures for when and how tax rate reductions should be implemented, including the roles of the commissioner of management and budget and the commissioner of revenue in these decisions.

Relevant Terms

provider taxes, Health Care Access Fund, biennium, tax rate reduction, expenditures, revenues, commissioner of management and budget, commissioner of revenue.